Markel 3Q15 Earnings Call Notes

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Markel’s (MKL) Q3 2015 Results

No longer going to bring duration in

“after several years where we left the duration of the fixed income portfolio decrease due to our concern about the possibility of higher overall levels of interest rates, we now are at the point where we expect to keep our duration from coming in anymore.”

Dry powder on the balance sheet is a big advantage

“As you can see, we have got some dry powder on our balance sheet. I think the option value of having quickly available capital to deploy as opportunities present themselves is a big advantage for Markel going forward. I would also add that we incur very little in the way of opportunity costs in doing so, given the low overall level of yields and investment returns all along the curve.”

Having trouble finding acquisitions that are fairly priced

“the things we would look for when we – when we are doing acquisitions is that culture has to be a fit, it’s number one. It needs to be a great strategic fit, good reason for it. And then obviously, it’s got be at a fair price and that’s probably the one we are having the most trouble with right now.”

Competition is more disciplined than in previous cycles

” while everything is competitive, I don’t think anybody is under the delusion that they can operate on a sloppy fashion on the underwriting side and make it up on investments. So the nature and tone of competition and where that bar is set in terms of underwriting profitability is lower this time around than what it would have been in previous cycles, so that’s somewhat good news.’